Nazi Germany and the Economic Miracle

Between February 1933 and the start of World War Two, NaziGermany underwent an ‘economic miracle’ – or so the leaders of Nazi Germany wanted their people to believe. Not only was the idea of an economic miracle sold to the people of Germany, the propaganda element also wanted the idea sold to Europe and to the wider world. But was there really an economic miracle in Nazi Germany or was it merely a card trick – one that appeared to happen but really did not?

Using the most basic of statistics, Nazi Germany certainly underwent major economic change. Like most other countries in Europe, WeimarGermany had suffered from a very high unemployment record and Nazi Germany inherited this. By the time World War Two started the unemployment rate in Germany had tumbled: trade unions had been tamed, the work force had seemingly developed a positive work ethic and job prospects were better – on paper at least.

But when certain data is factored into the equation, the issue of job creation is not quite as clear cut.

Between January 1933 and 1939, a series of laws were introduced that made it effectively impossible forJews to work in Nazi Germany. Those that fled abroad in fear of their lives left behind jobs that were filled. Those who remained in Germany simply could not work and once again their previous employment was taken over by ‘approved’ Germans.

Over time, many women were also excluded from many areas of work. Hitler had made it clear where his beliefs were: women true to the Aryan race should stay at home and look after children. This again reduced the unemployment rate.

Another ‘card trick’ was the introduction of compulsory military service for young men. If you wanted to attend a university, for example, you had to have done some form of either youth service or military training before attending university. Once again, those who were engaged in compulsory military service were removed from unemployment figures.

The final factor with regards to the huge drop in unemployment was fear – anyone who was found guilty of being ‘work shy’ could be condemned to the concentration camps that were found throughout Nazi Germany. While Hitler frequently referred to the “economic miracle” of Nazi Germany, people previously employed in what could be classed as professional employment ended up doing manual labour on the autobahns, for example. If such a job was refused, you could be accused of being ‘work shy’ with the known associated punishments.

Therefore, when the above is taken into account, it is true that unemployment figures tumbled. In 1932, in the dying days of the Weimar Republic, 5.6 million people were unemployed – many of whom gave their support to the Nazi Party as the only party that offered them hope. By 1934, this figure had fallen to 2.7 million – a seemingly impossible decrease. By 1936, only 1.6 million people were unemployed and by 1938 the figure was 0.4 million. Therefore in five years, unemployment had fallen by 5.4 million – 96%. No other west European country came anywhere near this figure – hence why it was labelled a “miracle”. Possibly the only surprise in this is that 400,000 remained unemployed.

Another issue that has to be studied to explain this ‘economic miracle’ is the simple fact that Hitler put Nazi Germany onto a war economy much earlier than the September 1939 outbreak of war. From 1935 on, a huge proportion of government spending was on the military. Therefore labour intensive industries such as steel production and coal mining prospered as there were needed in very large amounts to fuel the expansion of the military. In 1933, Krupp’s made a profit of 6.65 million Reichmarks. In just one year this had nearly doubled to 11.40 million Reichmarks. By 1937, the company had an annual profit of 17.80 million Reichmarks.

In 1933, Germany spent just 3% of her GDP on the military. By 1939, this had grown to 32% and 22% of the work force was directly employed in an industry somehow associated with military production. However, the production of consumer goods was not ignored – on the orders of Hitler. He wanted the German people to believe that they themselves were directly benefitting from the ‘economic miracle’ that he had fostered. For this reason there was a steady increase in consumer goods as 1939 approached, which continued into World War Two. It led to one unnamed general stating that Nazi Germany had to fight the war with refrigerators.

If Nazi Germany underwent an ‘economic miracle’ then a logical assumption was that the workers themselves benefitted in material terms. Many had employment under Hitler – but few dared to refuse what was offered. In fact if the figures are analysed in terms of the wages paid, workers were worse off under Hitler than they had been before the Wall Street Crash. 1934 was the only year from 1933 to 1939 when the wages paid to the workers equalled what an employed person earned in 1928. Other than this year, in every other year they got paid less. So while there was a steady increase in the production of consumer goods, how many workers could afford them? When compared to workers in America, the UK, Sweden and France, workers in Nazi Germany were paid the least.

However, in the area of imports/exports, Nazi Germany did quite well. In 1933, 1935, 1936 and 1937 there was a trade surplus while the annual trade deficit of 1934 and 1937 were relatively small.

However, whether Nazi Germany experienced an “economic miracle” depends on what stance you make. Was it merely a card trick whereby industry was mainly stimulated by the vast growth in the requirements of the military? Was it an “economic miracle” that the unemployment figures fell so drastically when groups were excluded from the data and others forcibly made to work in areas they were not trained for?